Indian Shares End at Over-Three-Month High

By

Gurdev Singh Virk

May 7, 2013 7:46 a.m. ET

MUMBAI--Indian shares closed at their highest level in more than three months Tuesday, lifted by sustained buying by foreign funds in front-line stocks such as cigarette maker ITC and ICICI Bank.IBN4.90%

The Bombay Stock Exchange's S&P BSE Sensex index gained 215.31 points, or 1.1%, to close at 19888.95 points -- its highest level since Jan. 31. The National Stock Exchange's Nifty index rose 72.50 points, or 1.2%, to end at 6043.55.

The gains in the stock market and strong dollar inflows, which dealers said were likely related to a corporate deal, lifted the local currency against the U.S. dollar. At 1120 GMT, the dollar was quoted at 54.12 rupees, compared with 54.18 rupees in Asia late Monday.

Dealers said the dollar inflows were most likely related to Qatar Foundation Endowment's deal announced last week to buy a 5% stake in Indian telecommunications major Bharti AirtelEQBHARTIARTL0.44% for $1.26 billion.

"Global liquidity is chasing emerging-market stocks and India seems to be one of the top beneficiaries," said Nilesh Karani, assistant vice president for research at Magnum Equity Broking.

Short-covering, mainly in bank shares, too helped, he said.

Mr. Karani said he expects the Nifty to test 6100 this week, as sentiment remains positive after the index ended above the crucial 6000 mark Tuesday.

Volumes in the BSE's cash segment increased to about 19.16 billion rupees ($354 million) from Monday's 18.17 billion rupees. As many as 1,353 stocks gained on the BSE, while 1,064 fell and 134 closed unchanged.

Foreign funds have purchased local stocks worth about $645 million in the previous three sessions, according to data from the Securities and Exchange Board of India. Tuesday's data weren't available.

All 13 of the BSE's sector-based indexes ended higher, with banks, auto and real estate outperforming on hopes a recent interest-rate cut by the central bank could help improve demand for their products and services.

ITC ended at a record high of 335.20 rupees, up 2.7% from its previous close. Among lenders, ICICI Bank closed 1.7% higher at 1163.75 rupees and HDFC BankHDB1.17% gained 1.8% to 687.20 rupees.

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